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Audio Industry Back From The Dead

10/22/2004 12:26:00 PM Eastern

Arlington, Va. — The audio industry is off life support and making a steady recovery following its rapid deterioration in 2003, but the patient remains in a weakened state, CEA statistics show.

The industry continued its turnaround in August, when a 5.2 percent increase in factory-level sales to $555.6 million helped drive up year-to-date sales by 11.4 percent to $4.53 billion, CEA said. Despite the surge, however, combined year-to-date sales were still 6.5 percent below 2002 levels.

For the year-to-date, all major segments — car audio, home components, home systems and portables — posted dollar gains, but only home component sales exceeded their 2002 level. Compared with 2002, this year-to-date sales are up 2.1 percent in home components but down 7.8 percent in portables, 6.9 percent in car audio and 1.1 percent in systems.

The trend line for 2003, however, is up. Here’s what CEA found:

Total Audio: August sales rose 5.2 percent to $555.6 million, continuing an uninterrupted string of monthly increases that began in September 2003. Year-to-date sales were up 11.4 percent to $4.53 billion, following mid-single-digit gains in May, June, and July and double-digit gains in three of the first four months of the year.

Home Components: A 42 percent August gain to $105 million kept up the segment’s double-digit momentum, contributing to a 45.6 percent gain in year-to-date sales to $798.4 million.

Home Systems: Sales of shelf, rack and home-theater-in-a-box systems soared 23.2 percent in August to $156.3 million, helping run up year-to-date sales by 14.8 percent to $1.06 billion. Of the YDT amount, HTIB accounts for more than half of system sales, or $555 million on 2.8 million unit sales. YTD system sales were up 56 percent in units and 7 percent in dollars.

Total Home Audio: Combined sales of components and systems rose 30.2 percent in August to $261.3 million, and year-to-date sales gained 26.2 percent to $1.86 billion.

Aftermarket Autosound: August’s sales dropped 7.2 percent to $157.9 million, but year-to-date sales were up 2.9 percent to $1.5 billion.

Portables: Sales fell 13.3 percent in August to $136.4 million, but year-to-date sales were up 3.1 percent to $1.17 billion.

Renewed interest in merchandising home audio at the retail level likely accounts for home audio growth, as does the expanding custom-installation market, said CEA director of industry analysts Sean Wargo. “My theory, too, is that consumers, many of whom have upgraded their displays and media devices (DVD), are now looking to invest more in the audio piece of the equation. First on the list are receivers capable of decoding the surround formats and speakers more capable of matching the design of the TV and of filling a room with the right sound levels.

“Whatever the case, home and portable audio are clearly at the vanguard of the resurgence of audio,” he said. “Car audio as well is seeing some great gains on the back of satellite radio. All of this spells growth for the audio market, even if we are still looking to catch up to previous highs set by the industry.”

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